Advisers say the Financial Services Council (FSC) is taking a “shoot first, ask questions later” approach to life insurance framework (LIF) reforms.

The Life Insurance Customer Group (LICG) has slammed the FSC for not considering any factors other than ‘churn' when designing the reforms.

“The FSC feel they are justified to tarnish and punish all 23,300 advisers licensed to provide personal insurance advice because of ASIC ‘findings’ based on 37 per cent of 79 targeted advisers,” the LICG argued in a statement this week.

“Worse, in their proposed ‘LIF reforms’, members of the FSC seek to reduce adviser remuneration to a point where, unless the client’s premium is more than $5,000 pa, it will not even recover adviser costs.”

The consumer group called on the FSC to reveal its justification.

“The FSC has not provided any evidence, reason or data on which to base their ‘reform’ recommendations,” LICG’s statement reads.

“Their commentary constantly points to a proposition of ‘churn’, not concern about quality of advice on any other basis, not industry sustainability, not the systemic poor institutional culture... the media continually provides evidence of, and not professional education standards.

“The FSC didn’t look for, or measure, any of these things when they directed ASIC in Phase 1 of the ASIC research, and for the record – it would appear that ASIC didn’t ask anyone but members of the FSC to assist in Phase 1 when they were designing their research project.”

The LICG wants details on the “significant” consumer benefits in the LIF reforms, it wants to know why the ACCC could not help with the reforms, and “why has the FSC orchestrated a carve-out of ‘Direct’ behind the back of the AFA and the FPA, and Minister O’Dwyer?”